THE IMPACT OF THE GOODE COMMITTEE REPORT ON SMALL PENSION SCHEMES

DOIhttps://doi.org/10.1108/eb024798
Published date01 February 1994
Date01 February 1994
Pages112-116
AuthorSTEWART RITCHIE
Subject MatterAccounting & finance
THE IMPACT
OF THE
GOODE COMMITTEE REPORT
ON
SMALL PENSION SCHEMES
Received: 23rd February,
1994
STEWART
RITCHIE
STEWART
RITCHIE
WAS BORN
AND
BROUGHT
UP IN
BELFAST,
BUT
WENT
TO
UNIVERSITY
AT
WARWICK, WHERE
HE
TOOK
A
MATHEMATICS DEGREE. FROM
THERE
HE
WENT
TO
SCOTTISH EQUITABLE
AS
AN ACTUARIAL TRAINEE, QUALIFYING
AS A
FELLOW
OF THE
FACULTY
OF
ACTUARIES
IN
1977.
WITHIN SCOTTISH EQUITABLE
HE HAS
HELD
A
VARIETY
OF
POSTS, MAINLY
IN THE
PENSIONS AREA. CURRENTLY
HE IS
DIRECTOR
(PENSIONS DEVELOPMENT).
HE HAS
BEEN
INVOLVED WITH SMALL SELF-ADMINISTERED
SCHEMES SINCE 1979,
AND
WAS
ON THE
COMMITTEE
OF THE
ASSOCIATION
OF
PENSIONEER TRUSTEES (APT) FROM 1985
TO
1991
AND
CHAIRMAN
OF THE APT
FROM
1988
TO
1991.
IN
1993
HE WAS
ELECTED
TO THE
COUNCIL
OF THE
FACULTY
OF
ACTUARIES.
HE
IS
A
MEMBER
OF THE
PENSIONS COMMITTEE
OF
THE ASSOCIATION
OF
BRITISH INSURERS.
WHY
THE
GOODE REPORT
MATTERS
The underlying theme
of the
Goode
Committee Report
is
first
to
define
the pension promise
and
then
to
make
as
sure
as
possible that
it is
met.
In formulating recommendations
for
the
delivery
of
these twin objec-
tives Goode
has
at the
level
of the
principle
differentiated hardly
at
all between large
and
small, insured
and non-insured, final salary
and
money purchase.
At
the
practical level Goode
has
been somewhat more accommodat-
ing,
as we
shall
now
discuss.
The key
issue
is to
make sure that practical
considerations
are
given full weight
in
the
Government's implementation
of Goode.
Minimum Funding Standards for Defined
Benefits
Goode recommends that:
- there should
be a
statutory mini-
mum solvency level
-
for
people
not
retired this should
be based
on
'Certified Amounts'
(basically transfer values without
allowing
for
discretionary
increases
or any
current solvency
problems
in the
scheme)
-
for
retired people
it
should
be
based
on the
cost
of
immediate
annuities
112

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